Ethical issues in the reporting of TransCentury share price plunge

Thursday February 11 2016

Trans-Century Chairman Zeph Mbugua with Managing Director Dr Gachau Kiuna at a past event. PHOTO | FILE |

Trans-Century Chairman Zeph Mbugua with Managing Director Dr Gachau Kiuna at a past event. PHOTO | FILE | NATION MEDIA GROUP

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In our journalism schools, students are taught to seek the truth and report it as fully as possible. Rarely are they taught that reporting information, even factually, may cause harm.

Those thoughts came to mind as I contemplated a complaint this week from the Board of Directors of TransCentury Limited (TCL), a public company listed at the Nairobi Securities Exchange.

The complaint was about a series of articles published by the Daily Nation and Business Daily, which said TCL owned more than it was worth.

Chairman Zephaniah Mbugua complained the NMG publications had not sought “clarification from us, or the regulators”.  The articles “will cause unnecessary panic, confusion and jitters among investors, our shareholders, and the public at large,” he said.

He further said TCL’s equity could be eroded by the sentiments resulting from the reporting. He expected NMG to exercise “high levels of editorial standard” and treat “sensitive business information” with caution.

I studied the stories and found they were just seeking the truth and trying to report it as fully as possible. Business Daily, in particular, was meticulous. It observed the right of reply except possibly in one article, which was not written by a staff reporter.

“BD has diligently complied with the very important requirements of fairness to people/companies we write about and never failed to offer them a chance to exercise the right of reply,” Managing Editor Ochieng Rapuro told me. Indeed, I found out, the Business Daily stories were well-documented and the writers had sought responses from TCL.

Mr Rapuro explained that the story Mr Mbugua specifically singled out in his complaint was an analysis by an investment manager. “His was actually a response to intense debate on our website and social media as to whether TransCentury’s fortunes were dwindling because it had found itself without the political leverage it allegedly enjoyed under former President Kibaki.”

However, John Kamau, who wrote the story: ‘How investment errors plunged firm owned by Kibaki allies into debt’, in the Daily Nation of February 5, admitted he did not contact TLC for their side of the story.

But he told me the story he wrote was a look at the historical and economic context on which TransCentury rose from – the people involved, how it rose and why its share is at its lowest. “I believed that investors have a right to know the history of their company and also would-be investors have a right to make informed decisions,” he said

I think that Mr Mbugua is still right in at least one point: The NMG publications should have minimised the harm to TLC, its investors and shareholders.  They could have done this by finding alternatives to the truth telling, for example, by not ignoring assurances from TLC that they were going to pay their debts and placing the story in the context of an indigenous pioneer in a risky but important area of investment.

In his column on February 10, “Negative sentiment to blame for TransCentury stock price fall,” Jaindi Kisero captures well the sentiment of minimising harm.

He said the reporting of the plunging stock prices of TransCentury  “tells me that the forces that want TransCentury taken over by foreigners have created a perfect setting for a take-over of the company by its bond holders.” He noted that the reporting turned into a self-fulfilling prophecy that pushed the TLC stock into an unpredictable downward spiral.

In ethical journalism, truth telling is not enough. Some forms of communication can be restricted or censored because of their negative effects.

This is a journalism code of ethical behaviour that tries to minimise harm to the subjects of our reportage.

If the NMG journalists had been guided by this harm principle, the story of TLC might have been different —not just serving a journalistic end but also balancing the interests of all stakeholders.

Send your complaints to [email protected] Call 3288000, mobile 0721989264